How to prepare for — and deal with — Medicare audits and investigations

ByDavid M. Glaser, JD

You don't need me to tell you that the number of audits and investigations in health care has increased steadily over the last 20 years. The next few blog entries will deal with how you can prepare for an audit or investigation, and how to respond if you are involved in one.

There are several things you should do now to prepare for an audit. First, you should make certain that you conduct regular documentation reviews to confirm that your documentation supports the bill. These reviews can be done internally or externally. If you conduct internal reviews, I recommend you periodically have an outside expert verify that your internal reviewers are neither too lenient or too harsh. Selection of an outside reviewer is important. Talk with the expert to determine his/her approach to reviews. Some consultants tend to view themselves as extensions of the government, while others will act more as your advocate. Before you hire a consultant, understand the consultant's general view and make certain it is consistent with your expectations.

Be sure to label any documentation analysis as a "review," not an "audit." The review is not an audit for several important reasons. Perhaps the most important point is that the review only examines documentation, and the conventional wisdom is that "if it isn't written it wasn't done," for Medicare that is not the law. While I strongly encourage you to document in accord with the Evaluation and Management Documentation Guidelines, the Medicare statute, and guidance issues from CMS makes it clear that if you are able to support that you provided a service, that service is properly billable even without proper medical record documentation. In other words, if you do a 99123, but your documentation, when scored using the E&M Guidelines is only enough for a 99212, I believe it is permissible to bill a 99213. However, since the Medicare statute says that the burden is on a physician to demonstrate that the service was performed as billed, it is important to recognize that a judge will be deeply skeptical of your assertions that you provided services that were not documented.

Rather than trying to convince a judge about the merits of your claim, it is much wiser to document consistent with the guidelines. However, you want to be sure that whoever is conducting your review understands that as the name confirms, they are documentation guidelines, not documentation requirements. The bottom line is that poor documentation creates risk for the organization — but it does not automatically create a Medicare overpayment, nor does it require a refund. If the code billed accurately reflects the work done, you can use the review as a "teaching moment" and move on. (Of course, if the code billed is higher than the work that was actually done, then a refund is almost certainly necessary.)

Make sure that whoever drafts the reviews chooses their wording carefully. I have seen reviews label documentation as "fraudulent" or use other inflammatory and legally inaccurate assertions. I encourage reviews to include the following disclaimer:

"This chart review is not an audit designed to determine whether we have been overpaid or underpaid. First, it is not a statistically valid sample. Moreover, it only reviews the documentation, without attempting to determine the amount of work actually performed. Therefore, these figures are far from scientific. However, since a Medicare review would base the initial overpayment determination solely on the documentation, these figures give you some idea of how your charts would fare in the first phase of a Medicare review."

You will also want to educate your staff about a few other points before any audit or investigation starts. While most staff recognize that audits are now common, it is helpful to remind them that they are so normal that the existence of an audit or investigation does not automatically threaten the health of the clinic. Preparing staff for the possibility of an investigation can lessen fear if one occurs.

A very, very important part of the educational process is informing the staff how to handle contacts from auditor or investigators. Unfortunately, it is increasingly common for investigators to suggest or even overtly state that it is improper to notify you of the government contact. For example, one orthopedic surgeon I work with received a subpoena that said, "The United States Attorney requests that you do not disclose the existence of this subpoena. Any such disclosure would impede the investigation being conducted and thereby interfere with the enforcement of the law." The government has absolutely no right to prevent one of your employees from notifying you if they are contacted by an agent. However, your employees will not know that. If a government agent tells them, or even asks them, to refrain from notifying you of the contact, the odds that the employee will disregard that instruction are low even if you have educated them of their rights. However, if you have not prepared them for this occurrence, there is no realistic chance they will inform you of the investigation.

You also want to make sure that staff understand that when they are contacted by a government agent, they are not required to talk. As any fan of cop shows knows, you can refuse to talk with a government investigator. (You do need to know that there are some state licensing boards that can discipline a licensed professional for refusal to cooperate with an investigation. While you can always refuse to speak with an investigator from the Office of Inspector General or the Federal Bureau of Investigation, be careful before refusing to speak with an investigator from a licensing Board. You are, however, generally allowed to take the time to retain legal counsel before speaking with a Board investigator.)

Some care must be exercised when you tell staff that they may refuse to speak with an investigator, because you cannot forbid them from talking with the government. Prohibiting contact with the government is viewed as obstruction of justice. Therefore, you want to notify the employees of their right to refuse to talk with an agent while also telling them they are free to speak to anyone they so choose.

In many states, the law requires you to provide an employee with legal representation if the employee requests it and the investigation is related to their job and the employee has acted in good faith, complied with the law and reasonably believed that their actions were in the best interest of the corporation. Even where the law does not require it, I highly recommend you notify your employees that in the event of an investigation you will hire a lawyer for them.

I have prepared laminated wallet cards that notify physicians and their employees of their rights in the event of an investigation. These cards are free. If you would like me to send you some for your practice, please just send me an email or give me a call.

The next blog entry will focus on how physicians should allocate liability for an audit within the group.